Muted stock market reaction to Ukraine so far

Ukraine: Muted market reaction, so far. At one point, the major indices were putting up their worst showing in a month...which is to say, it was not a disaster. At its worse, the S&P 500 was down 1.3 percent at about noon ET.

Two questions being asked:

How long does this go on? The longer it lasts, the more a premium is put on safe-haven bets like the U.S. Dollar, U.S.Treasuries and gold/silver. The concern is this may be the start of longer-term tensions between the West and Russia.

What happens if the West wins? If the West keeps most of the Ukraine free from Russia? A victory would be immensely costly for Europe and the U.S. The country is bankrupt. The Ukraine will need billions just to stabilize, but neither the U.S. nor Europe has the money to truly help Ukraine. The IMF of course would be the lender of last resort.

What's the fallout? Right now, it's modest. The CBOE Volatility Index (VIX) is at the highest level in a month, but at 16 that is hardly a level to generate great worries, and the futures contracts out in April and May are barely moving. Right now, markets are saying this is a short-term event. That could change.

Grain prices bear watching, particularly if this continues. Bad weather has already taken prices up, and not just in the U.S. Wheat, oats and corn are up, but grain prices have been rising independently of the Ukraine for the last month: There has been poor weather in Brazil. Grain and oil-seed prices rose five percent and 10 percent, respectively in February, according to Janney Capital Markets. Soybean prices were up four percent on poor weather in Brazil, which of course benefited U.S. exporters.

Because of this, commodity ETFs are seeing HUGE inflows.

The biggest one is the PowerShares DB Agriculture Fund (DBA), which is seeing volume five times normal today…and volume was big last week as well. This holds futures contracts on all the big commodities…sugar, cattle, corn, soybeans, coffee and wheat.

It's up 14 percent in the last six weeks…much of the gain is due to Ukraine concerns, but also because of poor weather in the U.S. and Brazil that has driven up grain and oil-seed and soybean prices.

The concern is that food costs may be rising for a variety of reasons.

Another ETF…the Market Vectors Agribusiness ETF (MOO) is also up in the last month…it's a basket of companies that derive the majority of their revenues from agriculture.

Elsewhere: Is the underlying economy stronger than we think? ISM manufacturing for February was above expectations at 53.2 vs. 51.3 in January. New orders and the backlog of orders were both well above January. Production was down, to 48.2 vs. 54.8, and there you can see the impact of the weather.

But--this is the main point--while weather was prominently mentioned as an issue, it was surprising how many positive comments were highlighted by participants. Here are a few:

"Higher than normal demand for this time of year." (Transportation Equipment)